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Sony Ericsson Sees a Gloomy Outlook in a Dull Market
22 Jan, 2009, 11:54 am IST |
tech2 News Staff
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Sony Ericsson put up a loss of US$176.3 million for the fourth quarter and declared to its investors a depressed expectation for cell-phone sales in the year 2009. The joint venture between Sony and LM Ericsson revealed it transported 24.2 million handsets in the final quarter of year 2008, which is below six percent from the earlier period and a 21 percent descent from the yea before. Sony Ericsson officials attributed the rapid sales drop to the global economic slowdown. In economic terms, 2008 has been a turbulent and troubled year with world markets going through a sober downswing. The mobile-phone market thus been greatly affected and, as expected, the fourth quarter continued to be extremely difficult for Sony Ericsson. According to sources from research agency Gartner, who confirmed Sony Ericsson's latest sales numbers, they claim that the sales figures were as expected, looking at the weakness of the European market and the company's struggling product-placement efforts in the U.S. market. Especially challenging was the fact that the company only had two products driving sales in the fourth quarter. These were the Xperia X1, Sony Ericsson's long-waited Windows Mobile-based touch screen device, and the Cyber shot C905, the company's first eight-megapixel camera phone. Sony Ericsson sources have claimed that the average selling price for its mobile phones in the fourth quarter was US$160.37 – a rise that the company has imputed on currency fluctuations as well as an increase in sales of high-end phones such as the Xperia and the Cyber shot. However, the company has maintained its global market-share approximation at around eight percent. Industry analysts reveal that the global economic downturn had sparked off a three-way battle between Sony Ericsson, Motorola and LG for third place in the global mobile-phone market. Though Sony Ericsson emerged as the winner in last year's third quarter, analysts believe that the company's rise had more to do with the issues that Motorola and LG faced than Sony Ericsson's ability to turn around its business. Sony Ericsson certainly faces challenging market conditions with predictions of a continued deterioration in the marketplace in 2009, particularly in the first half. The silver lining in the sky is Sony Ericsson's most recent cost-saving measures that are continuing as designed, with the full effect of annual savings of around US$397.6 million anticipated by the second half of 2009. |
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